Chatham Rock Phosphate: Maiden JORC Resource Defined

Media Release

7 April 2014

Chatham Rock Phosphate: maiden JORC Resource defined

Highlights:  Inferred Resources of 80 million m3 of phosphorite at an average grade of 290 kg/m3 for a contained 23.4 Mt of phosphorite  Average thickness of the Mineral Resource is 0.2 m directly at the surface of the sea floor  Additional exploration potential is in the order of 40,000,000 m3 with 8 to 12 Mt of contained phosphorite at grades between 200 and 300 kg/m3  The Mineral Resources are similar to earlier historical estimates undertaken on the Chatham Rise

Chatham Rock Phosphate (“CRP”) commissioned RSC Consulting Ltd (“RSC”) to undertake an independent Mineral Resource estimation study on its Chatham Rise Phosphorite Project (“Project”) and prepare a report ("the Report") to comply with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition (“JORC 2012”).

RSC Report study summary The Project covers an area of seabed phosphorite nodules situated about 450 km offshore of the east coast of New Zealand at approximately 350 to 450 m water depth (Figure 1).

CRP holds 100% of Mining Permit 55549 granted in December 2013, and the Continental Shelf licence MPL 50270 granted in February 2010.The first term of MPL 50270 was due to expire on 25 February 2014 and CRP submitted a renewal application for a further four years in December 2013. Two prospecting permit applications have been made for separate areas east and west of the prospecting licence.

Royal Boskalis Westminster NV (“Boskalis”), is a technical partner in the Project and holds a 17.6% shareholding of CRP.

The Chatham Rise phosphorite deposit occurs as a thin layer of phosphate-bearing glauconitic sand with thicknesses typically ranging from 0 to 1 m below the sea floor. The sand layer consists of mainly silt and sand-sized sediments, with phosphatised chalk nodules up to 15 cm in diameter (Figure 2).

Phosphorite nodules were first discovered on the Chatham Rise in the 1950s by a New Zealand Government survey. During the 1960s to 1980s several private and government sponsored cruises explored the Chatham Rise and surrounding seafloor area. The most extensive surveys were conducted by an agreement between the New Zealand Department of Scientific and Industrial Research and the West German Government on cruises by the German research vessels R.V. Valdivia in 1978 and R.V. Sonne in 1981.

Figure 1: Chatham Rise Phosphorite Project Location.

The 1978 R.V. Valdivia cruise was the first intensive sampling and research campaign conducted over the Chatham Rise and 655 samples from 689 attempts were collected over a 300 km 2 area in the west of the Project area. The majority of the samples were collected using a large Van Veen-style grab of 0.12 m3 volume, weighing approximately 400 kg.

The 1981 R.V. Sonne cruise was the most comprehensive exploration effort to assess the Chatham Rise phosphorite deposit. In addition to oceanographic, meteorological and geophysical data, the cruise collected 19 hours of video recordings of the sea floor as well as 519 sediment samples taken by a pneumatic grab-sampler. The seafloor sediment samples collected on this cruise are the most representative sample data collected on the Chatham Rise and are considered to be of a high enough quality to include in a resource estimation.

Since acquiring the licence in 2010, CRP has conducted six cruises in two programmes in the Project area. The key tasks of the cruises were to validate the previous work conducted on the Chatham Rise and collect further geological, geotechnical, geophysical and environmental data. For phosphorite grade estimation purposes the M.V. Tranquil Image cruise collected 55 samples using a Van Veen grab. The R.V. Dorado Discovery conducted four cruises out to the project area and collected 206 box core and grab samples.

Figure 2: Schematic cross-section of phosphorite-bearing sand zone (adapted from CRP, 2012).

Chatham Rise Phosphorite Project Mineral Resource

A total of 80 million m3 at an average grade of 290 kg/m3 is classified as an Inferred Mineral Resource at a cut-off grade of 100 kg/m3 for a total contained 23.4 Mt of phosphorite (Table 1). The average thickness of the resource is 0.20 m. There are no Resources classified in Indicated or Measured categories. Details about the informing samples, sample methodology, exploration and resource estimation process is shown in Appendix I.

Table 1 Statement of Mineral Resources (phosphorite) for Mining Permit 55549, Chatham Rise. Estimates are rounded to reflect the level of confidence in these resources at the present time.

Classifica Volume Thickness Ph Contained Ph tion (m3) (cm) kg/m3 Mt Inferred 80,000,000 20 290 23.4

Notes: 1. The Mineral Resource is reported in accordance with the JORC Code, 2012 edition 2. The Mineral Resource is contained within MP 55549 3. All resources have been rounded to the nearest 0.1 million tonnes 4. Ph kg/m3 is the weight of phosphorite per cubic metre 5. Contained Ph Mt is contained weight of phosphorite per million tonnes 6. Mineral Resource is reported at 100 kg/m3 cut-off grade

“RSC’s analysis to date indicates that a potentially economically extractable phosphorite Mineral Resource exists in the Project area. Several high-profile sampling cruises, most independent from each other, have all identified grades of economic interest within the same area. These cruises have been well documented and specific knowledge on sampling systems has been retained and included in this Report.” Exploration Potential

Exploration potential also exists within both MP 55549 and MPL 50270 (Figure 3, Table 2). Based on existing sampling data that did not make it into the resource because of lower sample density or lower sample quality ranking numbers, the exploration target within CRP’s tenements is interpreted from the existing sample information and area of sampling to be around 40,000,000 m3 with between 8 and 12 Mt of contained phosphorite at phosphorite grades between 200 and 300 kg/m3.

Figure 3 Exploration Potential

Table 2 Exploration potential for Phosphorite within CRP tenements Volume m3 Ph kg/m3 Contained Ph Mt Exploration 40,000,000 200 – 300 8 – 12 potential

Recommendations RSC recommends further seafloor sampling to be undertaken to both further increase the confidence in the established Mineral Resource and extend the boundaries of the resource, predominantly towards the west where currently lower-quality Valdivia data indicate an exploration target of at least 5 Mt phosphorite. RSC recommends that additional sampling will increase confidence in the grade and geology of the phosphorite deposit and may lead to an upgrade of the existing Inferred Resource to Indicated Resources.

Commentary – Chris Castle, Managing Director CRP Managing Director Chris Castle said the RSC Report significantly upgrades the status of the Mineral Resource, and also identifies a further 8 – 12 million tonnes exploration potential. “This is currently excluded from the 23.4 million tonnes but is within the mining permit area and with further sampling could be incorporated.” There is also additional exploration potential in the areas under application to the east (PPA 55967) and to the west (PPA 55971) of the existing permit areas.

Mr Castle said the JORC 2012 compliant Mineral Resource estimation was achieved through:  extensive validation by RSC of the available historical sample data;  the availability of more recent data gathered by CRP; and  the collaboration with scientists who worked on the project more than 30 years ago to corroborate the historical data and sampling procedures.

“ Our confidence that the exploration target extends into the neighbouring ground under application is based on geological modelling carried out by Kenex Knowledge Systems Ltd, our geological consultants, during the last year. This potential, which will be tested and evaluated upon the grant of the prospecting permit expected later this year, could add significantly to the known phosphorite resource.”

Contact Chris Castle on +64 21 55 81 85 or [email protected]

Competent Person Statement The information in this report that relates to Exploration Targets, Exploration Results and Mineral Resources is based on information compiled by René Sterk, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Sterk is a full-time employee of RSC Consulting Ltd. Mr. Sterk has no association with Chatham Rock Phosphate Limited other than being engaged for services in relation to the preparation of the Mineral Resources.

Mr. Sterk has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Sterk consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Appendix I: JORC Code, 2012 edition supporting tables.

Section 1 Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.) Criteria JORC Code explanation Commentary Sampling  Nature and quality of sampling (eg cut channels, random  The samples were collected on a number cruises using a variety of techniques chips, or specific specialised industry standard clam shell grabs, box cores and dredge samples. measurement tools appropriate to the minerals under  Samples were collected by lowering the sampling tool to the sea investigation, such as down hole gamma sondes, or floor and collecting a sample of the surficial phosphorite deposit. handheld XRF instruments, etc). These examples should  Sample quality was highly variable and a sample quality ranking not be taken as limiting the broad meaning of sampling. (SQR) process was applied to the samples and data collected. The  Include reference to measures taken to ensure sample SQR ranked the samples from the highest quality (1) to lowest representivity and the appropriate calibration of any quality (7). For the purpose of resource modelling only samples with measurement tools or systems used. SQR ranking 1 to 4 were used.  Aspects of the determination of mineralisation that are  Samples with SQR values of 1 to 4 consisted of pneumatic grab Material to the Public Report. samples collected on the Sonne cruise and Van Veen samples  In cases where ‘industry standard’ work has been done collected on the Valdivia cruise. this would be relatively simple (eg ‘reverse circulation  Representivity was obtained by taken large grab samples from what drilling was used to obtain 1 m samples from which 3 kg is effectively a 2-dimensional sampling situation. Given the large was pulverised to produce a 30 g charge for fire assay’). areas covered and the many samples collected, the sampling is In other cases more explanation may be required, such as considered broadly representative. Deeper sample penetration where there is coarse gold that has inherent sampling (more representative) was stimulated by adding extra weights to the problems. Unusual commodities or mineralisation types grab sampler (Valdivia) or by pneumatic closing of the bucket (eg submarine nodules) may warrant disclosure of (Sonne) detailed information.  Calibration was obtained by detailed measurements of sampling equipment.  Since the work is not "industry standard", the following detailed explanation is provided for each sampling programme:

Global Marine (1967 – 1968)

4369024_1  Sampling was conducted using a custom built pipe dredge with a diameter of 45 cm and the dredge was then towed behind the slow moving vessel.  RSC considers the Global Marine data to not be suitable for resource estimation as the error on the location of samples is excessive and the sampling is of poor quality.

Tangaroa (1975 – 1978)  No information detailing sampling procedures or the raw data collected was available.  RSC notes these grades are considered to be not suitable for estimation purposes as there is insufficient data to reliably calculate phosphorite grade and the sample data is unable to be verified.

Valdivia (1978)  The majority of the Valdivia samples were collected using a 0.12 m3 Van Veen grab. The sea floor sample area was between 45 x 45 cm to 66 x 66 cm and sample depths were up to 33 cm.  The Valdivia samples were washed through a 1 mm screen. The >1 mm fraction volume was measured using the water displacement method in graduated cylinders, and its phosphorite concentration estimated as a phosphorite volume percent.  Valdivia samples were given an SQR based on their sample quality and location accuracy and parts of the Mineral Resource are based on this data.

Sonne (1981)  The majority of the Sonne samples were collected using a 0.8 m3 grab. The sea floor sample area was 1.06 x 1.90 m and maximum calculated sample depth of 38 cm.  Small Van Veen grab, vibrocorer, box corer and chain bag dredge

4369024_1 were also trailed with limited success and none of this data has been used as they are not considered reliable.  The Sonne samples were processed using a custom-built vibrating sieve device containing an 8 mm and 1 mm screen. Any material observed not to have phosphorite was discarded overboard without being sieved and the sample was recorded as not containing phosphorite. Samples were washed through the sieve, the sieved fractions retained and its phosphorite concentration estimated as a phosphorite volume percent.  Sonne samples were given an SQR based on their sample quality and location accuracy and parts of the Mineral Resource are based on this data.

Tranquil Image (2011)  The samples were collected using a Van Veen grab sampler provided by NIWA. The Van Veen grab sampler used for this program was small and had a surface area of 0.25 m2.  The sediment collected was subsampled on the ship and packed for processing onshore.  Tranquil Image samples were given an SQR based on their sample quality and location accuracy.

Dorado Discovery (2011 – 2012)  Seafloor sampling was conducted using the large clamshell grab, and box corer.  The sea floor sample area for the large clam shell grab was 2.03 x 1.42 m.  An issue with the clamshell grab as a sampling tool is that it was not fully enclosed, resulting in washing of the contained sediment when the grab was retrieved, particularly at the sea surface where it was exposed to wave action. RSC has concerns that this action has the

4369024_1 potential to cause sample bias.  The box corer sea floor sample area was 20 x 30 cm to 50 x 50 cm and sample depths were up to 50 cm.  The Dorado Discovery samples were collected on the boat, subsampled and stored for on shore processing. Samples were separated into three size fractions: >8 mm; 0.8–8 mm and <0.8 mm. The phosphorite content was estimated for the >8 mm and 0.8- 8 mm fractions.  Dorado Discovery samples were given an SQR based on their sample quality and location accuracy. Drilling  Drill type (eg core, reverse circulation, open-hole  No drilling has been conducted. techniques hammer, rotary air blast, auger, Bangka, sonic, etc) and  Attempts to core the sediment using vibrocores were attempted on details (eg core diameter, triple or standard tube, depth of a number of cruises and were generally unsuccessful due to core diamond tails, face-sampling bit or other type, whether loss or equipment getting stuck in the underlying ooze. core is oriented and if so, by what method, etc). Drill sample  Method of recording and assessing core and chip sample  Sample recovery was noted on the sampling sheets as “washed” or recovery recoveries and results assessed. “washed out”. Any sample noted as washed had its SQR  Measures taken to maximise sample recovery and ensure downgraded to at least a ranking of 6 and was not used in the representative nature of the samples. estimation process. This was a significant issue with large grab  Whether a relationship exists between sample recovery samples collected on the Dorado Discovery cruise. and grade and whether sample bias may have occurred  Van Veen and the pneumatic grab sampling tools used were due to preferential loss/gain of fine/coarse material. designed to be totally enclosed after the sample was collected to minimise sediment loss due to water movement.  Nodules getting caught in the jaws of the Van Veen grab resulted in some washed out samples on the Valdivia cruise. When this occurred it was noted on the sample sheet.  Samples with low recovery (i.e. "washed") often had higher grades and for this reason these have been removed from the estimation process.

Logging  Whether core and chip samples have been geologically  Samples were geologically logged for presence of phosphorite

4369024_1 and geotechnically logged to a level of detail to support nodules, lithic and biological features. Some sieved fractions were appropriate Mineral Resource estimation, mining studies further logged visually for percentage phosphorite nodules. and metallurgical studies.  Some samples had geotechnical tests conducted on them including  Whether logging is qualitative or quantitative in nature. shear vane tests and samples collected for density tests. Core (or costean, channel, etc) photography.  Photographs of collected sample were taken on the Tranquil Image  The total length and percentage of the relevant and Dorado Discovery cruises, including photos of the sea floor intersections logged. sampling sites using a ROV on the Dorado Discovery cruise. No photographs were retained of the Valdivia and Sonne samples. Sub-sampling  If core, whether cut or sawn and whether quarter, half or Valdivia techniques and all core taken.  The majority of samples were sieved in their entirety, however, 37 sample  If non-core, whether riffled, tube sampled, rotary split, etc grab samples had only large (20 – 80 litres) subsamples of their preparation and whether sampled wet or dry. sediment sieved. How these subsamples were extracted from the  For all sample types, the nature, quality and grab samples is not recorded, an issue which was taken into account appropriateness of the sample preparation technique. when ranking the samples for quality (SQR) and inclusion into the estimation process.  Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.  Sampled sediment was washed through a 1 mm screen. The >1 mm fraction volume was measured using the water displacement  Measures taken to ensure that the sampling is method in graduated cylinders, and its phosphorite concentration representative of the in situ material collected, including estimated as a phosphorite volume percent. for instance results for field duplicate/second-half sampling.  The sampling technique and size is not considered to be optimal, however considered acceptable for the type and grain size of  Whether sample sizes are appropriate to the grain size of material being sampled. the material being sampled.  Since the sub-sampling was very limited (only 37 samples and one extra step in the process, rather than the many sub-samples at conventional laboratory assay techniques), the representivity is not considered affected.  No field duplicate samples were taken and therefore it could not be determined whether the sampling is representative of the in situ material collected. Only three sample pairs were within 70m of each other and could be considered as pairs given the large sampling area. These pairs all had comparably high grades.

4369024_1 Sonne  Small subsamples for onshore analyses were taken using a shovel leaving the bulk of the sample for processing. Once logging was completed the entire contents of nodule-bearing grabs was dumped into a hopper. The hopper funnelled the sediment onto a custom- built vibrating sieve device containing an 8 mm and a 1 mm screen. Any material observed not to have phosphorite was discarded overboard without being sieved and the sample was recorded as not containing phosphorite. Samples were washed through the sieve and the >8 mm and 1-8 mm fractions retained; the <1 mm fraction was washed overboard.  Each retained fraction was then weighed, initially using spring weights but this proved difficult to do accurately due to the constant motion of the ship. As such the procedure was adapted and volume- calibrated bins were used to determine the weight of the >8 mm and 1-8 mm fractions. It is not clear when this change in procedure was adopted. Trials were run to determine the graduated weight of different volumes of the separate fractions in bins and thereafter the >8 mm and 1-8 mm fractions were placed in the bins and their weight assigned based on their volume. Unlike the calculation for net sediment weight this process does not use a numeric assumed density, however it does assume that the density of all the >8 mm and 1-8 mm fractions (respectively) were approximately the same.  The weight percent of each fraction relative to the estimated total weight of the sand was calculated from the volume-calibrated kilograms of the >8 mm and 1-8 mm sieved fractions. The percentage of contained phosphorite in each fraction was estimated visually and multiplied by the weight of the fraction in order to calculate the amount of phosphorite (kg) in each fraction. These weights were summed to determine the total amount of phosphorite (kg) in each sample.  No field duplicates were taken. However, analysis of 33 sample pairs

4369024_1 that are within 100 m of each other shows poor precision, consistent with the nature of the mineralisation.  The sampling technique and size is considered to be good, especially considering practical restrictions and considered acceptable for the type and grain size of material being sampled.  The Sonne samples are regarded as the best quality samples collected on the Chatham Rise and have the highest SQR values.

Dorado Discovery:  Box core samples were retrieved, surface characteristics of the sediment were noted and two push cores per box core sample were collected for geotechnical and biological assessment. The remaining sample was processed aboard the Dorado Discovery with the top 15 cm of sediment being washed through a 500 μm sieve and the underlying sediment through a 1,000 μm sieve. Biological specimens were collected and both biological and sediment samples were stored in formaldehyde solution. Remaining sediment was bagged for on-shore geological analysis.  Geological analysis of the >8 mm and 0.8-8 mm fractions was carried out; the <0.8 mm fraction was not studied. The >8 mm sample fractions were processed in detail. The grain lithologies were separated and described and phosphorite nodules were further classified by size. The 0.8 – 8 mm fraction of twelve of the grab samples was submitted to GNS where they were air dried and a subsample of the fraction spread out under a stereoscope and observed under ca. 50x magnification. Grain types were determined and classified using Powers Roundness Scale and ASTM 2488-00 for grain shape; grains were picked at random until a total of at least 200 grains were analysed per sample.  The sampling technique and size is not considered to be optimal, and to err on the side of caution they have been removed from the estimation process.

4369024_1  The smaller samples collected on the Dorado Discovery means they are more likely to be affected by volume-grade variances.  No field duplicates were taken and therefore it cannot be determined if the sampling is representative of the in situ material collected Quality of assay  The nature, quality and appropriateness of the assaying  The phosphorite grade estimations (ph kg/m3) are determined in a data and and laboratory procedures used and whether the field based environment and have not been conducted under laboratory tests technique is considered partial or total. laboratory conditions.  For geophysical tools, spectrometers, handheld XRF  Analyses were completed for major element chemistry and trace instruments, etc, the parameters used in determining the elements on selected Valdivia, Sonne and Dorado Discovery analysis including instrument make and model, reading samples in two size fractions >8 mm and 1-8 mm. These showed times, calibrations factors applied and their derivation, significant correlation of chemistry with nodule size: Larger nodules etc. had lower P2O5 and higher CaO content than the smaller ones.  Nature of quality control procedures adopted (eg  In 63 analyses from 38 Sonne samples the >8 mm nodules

standards, blanks, duplicates, external laboratory checks) averaged 19.8% P2O5 and the 1–8 mm nodules averaged 22.2%. In and whether acceptable levels of accuracy (ie lack of bias) 63 Valdivia bulk samples the P2O5 average was 22.0%. and precision have been established.  A detailed particle size and chemical analysis has been carried out on the suite of Dorado Discovery samples by CRP. The process involved a sieve analysis to provide split fractions of the bulk Dorado Discovery samples into the size ranges of the 1.18–1.70, 1.7–2.0, 2.0–4.0, 4.0–8.0, 8.0–25.4 and 25.4–80.0 mm. The chemical composition was determined for each fraction by XRF analysis.  No QC was conducted (standard, blanks or duplicates). Most of the samples were collected during the 1970s and 1980s before the understanding of the significance of sample quality control for sampling. Later sampling by CRP also lacked adequate QC due to supervising staff at the time not understanding the standard QC requirements.  No external laboratory checks have been conducted. Samples from pre-CRP cruises have not been retained and are unable to be reprocessed. CRP samples have been retained but they are no

4369024_1 longer representative due to sub-sampling.  For the purpose of classifying the resource in Inferred Mineral Resource category, acceptable levels of accuracy, bias and precision have been established by a thorough review of procedures as well as through a comparison of results the various cruises in the same area and in general. It is clear that all sampling shows poor precision, which is largely due to the style of mineralisation with a large inherent variability in grade. However, poor sampling techniques have had an impact on the precision, which RSC has attempted to remove as much as possible by removing bad data from the estimation process. Accuracy is equally not optimal and some bias has occurred by means of the various different sampling techniques. RSC regards this bias, although difficult to quantify, as within acceptable boundaries for the Inferred Mineral Resource classification. Verification of  The verification of significant intersections by either  Specific high grade samples were not individually verified, however sampling and independent or alternative company personnel. some overlap occurs between the various campaigns and these all assaying  The use of twinned holes. confirm the general tenor of the phosphorite grades. The campaigns  Documentation of primary data, data entry procedures, were all independent form each other and this forms a key aspect of data verification, data storage (physical and electronic) the verification of grades and the establishment of the Mineral protocols. Resource.  Discuss any adjustment to assay data.  A digital database was supplied to RSC by consultants from Kenex Knowledge Systems Ltd who had been involved with the data management from the start of the Project and data collection for the Dorado Discovery cruise. Compilation of the database was a collaborative effort by Kenex and NIWA. Initially, NIWA compiled the Valdivia and Sonne data from hard copy maps and scanned sample sheets. The Global Marine, Tranquil Image and Dorado Discovery data were later added by Kenex. No data were compiled from the Tangaroa cruise and these have been sourced by RSC from Cullen (1978). Kenex has added some calculation fields from the historic data to further analyse sample grade estimations and prospectivity

4369024_1 analyses.  RSC conducted a thorough validation of Valdivia and Sonne data from scanned sample sheets, and a best-possible validation of the Tranquil Image and Dorado Discovery data. A number of errors and inconstancies were noted and corrected.  The data was stored in Microsoft Access tables and exported into flat Microsoft Excel tables to facilitate verification.  As part of the data verification process, the relative and absolute quality of the data was assessed. This is a critical part of the assessment of the data as it depicts what the quality threshold is to either allow or disallow data to enter into the estimation process. Across and even within the various sampling campaigns, different sampling, sub-sampling, logging, volume and depth measurements, grade calculations, and location measurements have occurred and a matrix was constructed to rank the impact of all these factors.  RSC attempted to determine if there is a relationship between the general nodule abundance and the phosphorite grade of the nearest samples, however this could not be demonstrated. ROV images confirm the existence of phosphorite nodules at a number of Dorado Discovery sample sites and also show the visual differences between higher and lower grade sites. Also along the ROV sample line transects, the images and nodule counts also confirm the high short-range variability of the sample grades.  RSC also compared sediment depths determined from CPT data and sample depths. The results of the CPT work showed sand depths which were often considerably thicker than the sample depths determined by the seafloor sampling with an average from the CPT showing a sand depth of 0.47 m with a maximum of 2.27 m. This is significantly thicker than the depth of the sediment as indicated by the samples, which averages 0.23 m.  Using the raw sample data collected RSC recalculated the phosphorite grade (ph kg/m3) and sample depth. The estimation

4369024_1 process is not consistent between the cruises due to the variations of sampling tools used and raw data collected.

Valdivia  RSC has reviewed the grade calculations and has re-estimated the Valdivia grades. Phosphorite volume percent was calculated by first multiplying the estimated percentage of phosphorite within the >1 mm fraction by the volume of this fraction which yielded the volume of phosphorite in the >1 mm fraction (i.e. excluding shell fragments, etc.). This volume was then divided by the sieved sample volume to give phosphorite nodule volume percent for the sieved sample. Phosphorite grade is then determined by multiplying the calculated phosphorite volume percent by the average density of phosphorite nodules (taken as 2.72 g/cm3 based on the most recent density data collected by CRP in 2011).  The penetration thickness and/or sand thickness recorded for each sample is assumed to be equal to the true sample/sand depth of the samples, as it is unknown whether grab samples underwent any lateral compression during closure of the grab.

Sonne  RSC has reviewed the grade calculations and has re-estimated the Sonne grades using a volume-penetration relationship based on the volume of the grab and penetration depth of the sediment. Based on the grab specifications, a detailed 3D model of the closed grab was generated and the volume calculated in 1 cm vertical increments. These were compared to the recorded penetration depths of total sediment and thickness of sand for each sample in order to calculate the volume of sand in each sample. The amount of phosphorite (kg) in each sample was calculated from the estimated percentage of phosphorite and volume-calibrated weight of the 1–8 mm and >8 mm sieved fractions. RSC calculated the phosphorite grade (kg/m3)

4369024_1 by dividing the total calculated phosphorite (kg) by the calculated volume of sand (m3) in each sample.  Due to the compression of the sampled sediment during grab closure the thickness of the sample in the grab cannot equal the actual sample depth on the sea floor. To calculate this depth, it has been assumed that down to a depth of 38 cm the grab was able to sample 100% of the sediment contained within the 2 m2 area of its open jaws. By comparing the volume of in-situ sediment in 1 cm increments with the 1 cm incremental cumulative volumes previously determined for the grab it was possible to generate a conversion table for penetration depth to true depth of sediment for the Sonne grab.

Dorado Discovery  The supplied data contain the calculated dry weight percentages of these fractions as well as the original sample wet and dry weights. As data from the Dorado Discovery grab samples indicate that >1 mm sieved fractions contain significant constituents other than phosphorite, RSC has factored the dry weight percentages of the >8 mm and 2—8 mm box core fractions down to account for non- phosphorite material in these fractions, using the grab sample sieve data for reference. For the >8 mm fraction of the grab samples the weight percent of phosphorite averaged 91% of the fraction weight, and for the twelve measured 0.8—8 mm grab sample fractions the phosphorite volume percent averaged 74% (excluding outliers).  The box core >8 mm and 2—8 mm sieved fractions were multiplied by these percentages, respectively. RSC notes that applying a volume percent to a weight percent in the case of the 2—8 mm sieved fraction assumes that the density of all constituents is the same, which is not the case. RSC also notes that the difference between the sieved fraction ranges of 0.8—8 mm and 2—8 mm for the grab and box core samples, respectively, means that using the

4369024_1 volume percent of phosphorite from the grab samples to proportion the weight percent of phosphorite in the box core samples is likely to be inaccurate and lead to an underestimation in grade as it does not take into account the removal of the 1–2 mm sand fraction (assumed to be comparatively phosphorite poor) from the box core sieved fraction. This is in contrast to the overestimation in grade expected if no correction factors are applied.  Summing the factored weight percentages of the sieved fractions and multiplying by dry weight of the sieved sample estimates gives the contained kilograms of phosphorite. Dividing this weight of contained phosphorite by the volume of each sample (estimated from the box area, 0.2 m x 0.3 m, multiplied by the thickness of the sediment in the box) yields sample grade (kg/m3).  The penetration thickness and/or sand thickness recorded for each sample is assumed to be equal to the true sample/sand depth of the samples, as it is unknown whether box core samples underwent any vertical compression during closure of the grab.

Location of data  Accuracy and quality of surveys used to locate drill holes Valdivia points (collar and down-hole surveys), trenches, mine workings  Sample locations were determined using a combination of satellite and other locations used in Mineral Resource estimation. navigation (SATNAV) with an integrated Doppler sonar system, and  Specification of the grid system used. a network of underwater acoustic transponders (ATNAV). Eight  Quality and adequacy of topographic control. transponders were deployed in the east of the sampling area and three transponders were deployed in the west. The ATNAV system was used to determine the location of 647 samples, with the location of the remaining samples determined solely using SATNAV.  As the transponders were located using SATNAV the overall accuracy of sample locations is estimated to be within 0.25 – 0.5 nautical miles (0.5 - 0.9 km), however the precision of applicable sample locations relative to each other is increased by the use of the transponder network reducing the error associated with relative sample locations to approximately 5 – 10 m.

4369024_1 Sonne  The Sonne was equipped with a MAGNAVOX satellite navigation system coupled to a Doppler sonar to determine its geographic position. Using this system a position accuracy of 200 to 500 m was achieved. To increase the location accuracy of samples an underwater acoustic transponder navigation (ATNAV) system consisting of 6 to 8 transponders was laid 3,000 to 4,000 m apart on the sea floor. Under favourable conditions the system had an accuracy of 30 to 50 m within the central parts of the grid and 100 m near the edges.

Dorado Discovery and Tranquil Image  During the cruises sample locations were determined by GPS. The approximate location was established by the navigation equipment installed on the vessel and the actual sample location was recorded using a hand-held GPS at the time the sample was taken on board. GPS is a satellite-based radio-navigation system with precision of 5 m.

 Multibeam swath bathymetry data has been collected throughout the licence giving good control of depth to sea floor. A total of 426 km2 of multibeam swath bathymetry data was collected. The data was gridded at 20 m and 25 m cell sizes. Within the licence area, water depths increase from a minimum of 300 to over 600 m to the south and north. The area of primary interest is on the crest of the rise in water depths of 350 to 450 m, with a saddle depth of 390 m. Data spacing  Data spacing for reporting of Exploration Results.  The data spacing of samples within the licence area is variable and and distribution  Whether the data spacing and distribution is sufficient to does not follow a consistent grid. Sample spacing ranges from 100 establish the degree of geological and grade continuity m to over 1 km. appropriate for the Mineral Resource and Ore Reserve  Data spacing is considered sufficient to imply geological and grade estimation procedure(s) and classifications applied. continuity for the type of mineralisation being targeted under the

4369024_1  Whether sample compositing has been applied. JORC Code, 2012 edition. It is considered suitable data spacing for Inferred Resources.  No sample compositing has been applied as it is not relevant to the type of sampling. Orientation of  Whether the orientation of sampling achieves unbiased  The target zone is a thin horizontal layer of phosphorite that occurs data in relation sampling of possible structures and the extent to which at the sea floor surface. Since this is a 2-dimensional sampling to geological this is known, considering the deposit type. situation, the orientation of sampling is not relevant. structure  If the relationship between the drilling orientation and the  Grab sampling tools will not sample equally across the entire sample orientation of key mineralised structures is considered to depth due to the arc-like closing action of the jaws. This means the have introduced a sampling bias, this should be assessed samples are slightly biased towards the material sampled nearer the and reported if material. surface. This effect is limited by the average depth of the samples taken being 0.2 m. The Mineral Resource is only based on that part of the deposit that has been sampled (i.e. if only 20cm sample depth was achieved, the Mineral Resource was limited to this depth, regardless of the mineralised material potentially extending deeper). Sample security  The measures taken to ensure sample security.  Sampling was conducted under geological supervision.  No special security measures were taken in regard to the collection and storage of the samples, however as measurements were carried out on board by the supervising staff, security issues are not considered an issue. Audits or  The results of any audits or reviews of sampling  No audits or reviews of sampling techniques outside the one carried reviews techniques and data out in the Report by RSC have been completed.

Section 2 Reporting of Exploration Results (Criteria listed in the preceding section also apply to this section.) Criteria JORC Code explanation Commentary Mineral  Type, reference name/number, location and  CRP holds 100% of Mining Permit 55549 (820 km2) and the tenement and ownership including agreements or material issues 3,906 km2 (formerly 4,726 km2) Continental Shelf Licence MPL land tenure with third parties such as joint ventures, 50270. status

4369024_1 partnerships, overriding royalties, native title  The Ministry of Business, Innovation and Employment granted interests, historical sites, wilderness or national park Mining Permit 55549 to CRP for the extraction of rock and environmental settings. phosphate on the Chatham Rise on the 6th of December 2013.  The security of the tenure held at the time of The permit was granted for 20 years. As part of the permit reporting along with any known impediments to conditions, CRP is required to obtain a marine consent from the obtaining a licence to operate in the area. Environmental Protection Authority (EPA) before it is able to begin mining.  The MPL 50270 licence was due to expire on the 25th February, 2014. A licence renewal application has been submitted on 20th December, 2013 to the New Zealand Petroleum and Minerals. CRP has been able to refine the area of focus, reducing the footprint of the licence. The licence has been reduced from 4,726 km2 to 2,887 km2. This area excludes the removed area which has had the mining permit granted over it.  Royal Boskalis Westminster NV (Boskalis) is a technical partner in the Project and hold a 17.6% shareholding of CRP.  The MPL 50270 licence came with environmental conditions that required the licence owner to comply with environmental guidelines published by the International Marine Minerals Society “Code of Environmental Management of Marine Mining”, conduct environmental baseline studies and monitor and report effects of exploration activity on the environment.  The payment of a royalty to the New Zealand Government on production from any future mining operation has been set at the higher rate of 2% of revenue or 10% of pre-tax profits. Exploration  Acknowledgment and appraisal of exploration by  Various programmes have been undertaken since the 1950s. done by other other parties. Initial reconnaissance surveys were conducted by the New parties Zealand Geological Survey in 1952 and later Global Marine Inc. in 1967–68. Global Marine Inc. held the first mineral

4369024_1 prospecting licence (MPL) over the Chatham Rise extending over 100,000 km2. These surveys undertook dredge sampling over much of the Chatham Rise, noting the presence/absence of phosphorite nodules, and helped to prioritise areas for later expeditions.  From 1971, JBL Exploration NZ Ltd. (JBL) held a prospecting licence covering a portion of the MPL previously held by Global Marine Inc.  From 1975 – 1978 the New Zealand Oceanographic Institute (NZOI) conducted a more localised survey to determine the distribution and thickness of phosphorite-bearing sediments over an area now covered by MP 55549.  Subsequent to this campaign a collaboration between the West German Government and the New Zealand Department of Scientific and Industrial Research (DSIR) launched two extensive sampling surveys, one in 1978 utilising the R.V. Valdivia, and the second in 1981 utilising the R.V. Sonne. Together the two campaigns collected over 1,100 sediment samples, the vast majority from within the area presently encompassed by MPL 50270. Data from these cruises provides the most comprehensive data for phosphorite grade determination collected to date. The New Zealand company Fletcher Challenge Ltd. was involved in the 1981 work and was granted a prospecting licence for further investigation of the phosphorite deposits, but no further data collection surveys were undertaken and the licence was allowed to lapse in 1984.  No mineral permits were issued over the Chatham Rise until MPL 50270 was granted to CRP in 2010. Geology  Deposit type, geological setting and style of  The phosphorite deposit occurs as a thin layer of phosphorite- mineralisation. bearing glauconitic sand with an average thickness of 0.2 m,

4369024_1 but can reach thicknesses of more than 0.5 m in places. The sand layer consists of mainly silt and sand-sized sediments, with the phosphatised chalk pebbles up to 15 cm in diameter. The layers would have been originally stratified with phosphorite nodule layers representing the periods of erosion and phosphatisation; however, later post-depositional modifications have resulted in these layers becoming disrupted. The underlying chalk layer occurs as a white ooze at the base on the sand. The upper 20-30 cm of this zone can be mixed due to bioturbation and include burrows filled with the overlying sand. The ooze also contains weathered chalk, an important constituent for phosphorite nodule formation. At depth, the ooze grades into an indurated chalk layer.  The present composition of the phosphorite nodules originated during the late Miocene by diagenetic replacement of the chalk pebbles. Apatite based cement replaced pre-existing glauconite suggesting that the main Late Miocene phosphatisation event was followed by minor authigenic phosphatisation which mainly cemented fractures and bore holes.  Analyses by x-ray diffraction show that apatite and calcite are the main mineral constituents. Analyses on separated Sonne samples show apatite contains P2O5 up to 30.05%. The apatite mineral is assumed to be francolite (carbonate-fluorite-apatite). Drill hole  A summary of all information material to the  No drilling has been conducted on the Project. Information understanding of the exploration results including a  Sample data used as informing data for the Mineral Resource is tabulation of the following information for all Material detailed in Appendix II. drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole

4369024_1 collar o dip and azimuth of the hole o down hole length and interception depth o hole length.  If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. Data  In reporting Exploration Results, weighting averaging  No data aggregation has been conducted. aggregation techniques, maximum and/or minimum grade  No high grade cut-off has been applied. methods truncations (eg cutting of high grades) and cut-off  Sample locations consist of a single grade and a sample depth. grades are usually Material and should be stated.  Metal equivalents have not been reported as they are not  Where aggregate intercepts incorporate short relevant for the commodity reported. lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.  The assumptions used for any reporting of metal equivalent values should be clearly stated. Relationship  These relationships are particularly important in the  The geometry of the phosphorite deposit is essentially a thin between reporting of Exploration Results. (<1 m) horizontal unit at the sea floor. It extends laterally for mineralisation  If the geometry of the mineralisation with respect to tens of kilometres. widths and the drill hole angle is known, its nature should be  The sampling is conducted perpendicular to the mineralisation intercept reported. so the sample depths noted are true depths. lengths  If it is not known and only the down hole lengths are  In places the mineralisation extends below the sample depth. reported, there should be a clear statement to this This was not always sampled due to the depth limitation of the effect (eg ‘down hole length, true width not known’). sampling methods. The Mineral Resource is only based on that

4369024_1 part of the deposit that has been sampled (i.e. if only 20cm sample depth was achieved, the Mineral Resource was limited to this depth, regardless of the mineralised material potentially extending deeper).  No grade has been estimated beyond the sample depth. Diagrams  Appropriate maps and sections (with scales) and  See Figures above for plan view of sample locations. tabulations of intercepts should be included for any  No sections are shown as the deposit is essentially two significant discovery being reported These should dimensional. A schematic section is shown in Figure 2. include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views. Balanced  Where comprehensive reporting of all Exploration  All sample details including grades and depths used in the reporting Results is not practicable, representative reporting resource estimation are shown in Appendix II. of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results. Other  Other exploration data, if meaningful and material,  A significant amount of data has been collect by previous substantive should be reported including (but not limited to): government sponsored surveys and more recently by CRP. exploration geological observations; geophysical survey results; These include: data geochemical survey results; bulk samples – size and  underwater photography and video data; method of treatment; metallurgical test results; bulk  sidescan sonar surveys data; density, groundwater, geotechnical and rock  seismic survey data; characteristics; potential deleterious or  multibeam bathymetric surveys; contaminating substances.  oceanographic monitoring data;  environmental monitoring data;  geotechnical investigations including particle size analyses, density testwork, moisture contents, CPT and strength tests;  K-Ar dating;  XRD analysis; and

4369024_1  ROV dives and seabed mapping; Further work  The nature and scale of planned further work (eg  CRP is continuing to assess the Chatham Rise Phosphorite tests for lateral extensions or depth extensions or deposit. This work may include collection of infill samples for large-scale step-out drilling). grade analysis, environmental studies, and mining studies.  Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Section 3: Estimation and Reporting of Mineral Resources (Criteria listed in section 1, and where relevant in section 2, also apply to this section.) Criteria JORC Code explanation Commentary Database  Measures taken to ensure that data has not been corrupted by, for example,  RSC conducted a thorough validation of integrity transcription or keying errors, between its initial collection and its use for Valdivia and Sonne data from scanned Mineral Resource estimation purposes. sample sheets, and a best-possible validation  Data validation procedures used. of the Tranquil Image and Dorado Discovery data. All possible care has been exercised to remove errors from legacy data.  A number of transcription errors, minor calculation errors, and rounding errors were noted in the Valdivia and Sonne data. All inconsistencies have been either fixed or the ranking of the sample quality appropriately downgraded where fixing was not possible.  Dorado Discovery and Tranquil Image have had 10% of the data validated with no significant issues noted. Data from the Global Marine and Tangaroa work have been accepted at face value as original data was not available.  As part of the data verification process, the

4369024_1 relative and absolute quality of the data was assessed in as much detail as practically possible. This is a critical part of the assessment of the data as it depicts what the quality threshold is to either allow or disallow data to enter into the estimation process. Across and even within the various sampling campaigns, different sampling, sub-sampling, logging, volume and depth measurements, grade calculations, and location measurements have occurred and a matrix was constructed to rank the impact of all these factors.  Samples with SQR values of 1 to 4 were used for resource estimation, this resulted in only Sonne and Valdivia samples being used. Site visits  Comment on any site visits undertaken by the Competent Person and the  None of the Competent Persons have visited outcome of those visits. the Project as the mineralisation is 400 m  If no site visits have been undertaken indicate why this is the case. below the sea surface.  For site-specific information, RSC relies on the experience of people who were directly involved with sampling and estimating phosphorite grade (Dr. Falconer, Dr. Kudrass, Dr. Nielsen). Mr. Sterk has visited CRP’s sub- sampling site in Wellington in January 2014.  Dr. Robin Falconer, a chief scientist with CRP, a professional marine scientist and seabed phosphorite mineralisation expert. Dr. Falconer has visited the site, aboard the first and third legs of R.V. Sonne, during the 1981 sampling campaigns. At the time of the cruise he was a consultant to Fletcher-Challenge

4369024_1 Corporation Ltd and held the position of geophysicist. He was involved with the sediment sampling, bulk sample processing and phosphorite analyses conducted on the cruise. Since July 2010, Dr. Falconer has worked as a chief scientist for CRP and has been directly involved with the planning and execution of the 2011 and 2012 sampling programmes conducted by the Dorado Discovery and Tranquil Image. He has recently also joined the board of CRP.  Dr. Hermann Kudrass, a former director of the German Federal Institute for Geosciences and Natural Resources and a seabed phosphorite mineralisation expert. Dr. Hermann Kudrass first visited the Project site in 1978 aboard the R.V. Valdivia working under a joint West German-New Zealand Agreement for Scientific and Technological co-operation and was involved with both legs of the cruise. At the time of the cruise he was a marine geologist working with the BGR. Dr. Kudrass was involved with all aspects of the development of sample procedures, sampling, and grade analyses conducted on the cruise. Dr. Kudrass was also a marine geologist working with the BGR on the R.V. Sonne cruise leg 2 where he was involved in all aspects of sampling. He has published a number of scientific papers detailing the work conducted on the R.V. Valdivia and R.V. Sonne cruises including previous resource estimations of the deposit. Dr. Kudrass also

4369024_1 visited the Project aboard the Dorado Discovery for approximately 12 days during the April 2012 geotechnical survey.  Dr. Simon Nielsen, a Senior Geologist with Kenex Knowledge Systems Ltd visited the Project three times aboard the Dorado Discovery in 2012. He has spent approximately 5 weeks on site. Dr. Nielsen was closely involved with collecting geological samples on the Dorado Discovery, logging the samples and onshore separation analyses of the samples. Geological  Confidence in (or conversely, the uncertainty of) the geological interpretation  Geological wire-frames were created for ten interpretation of the mineral deposit. different seismic facies delineated during the  Nature of the data used and of any assumptions made. Sonne cruise to sub-domain the sample data  The effect, if any, of alternative interpretations on Mineral Resource sensibly and create appropriate domains for estimation. grade estimation. However, given the large overall size of the area covered by the  The use of geology in guiding and controlling Mineral Resource estimation. sampling campaigns, and the relatively low  The factors affecting continuity both of grade and geology. resolution of the geological data within these large areas, the domains can only be considered applicable to the large-scale variability of the data. Smaller scale features like individual ice-berg furrows are unable to be defined into domains at this stage.  Though geological understanding of the process is considered sound, the resolution of the data does not allow optimum application of this knowledge. This has been taken into account when classifying the Resource.  Given the low resolution of the available wire- frames for geological domains it is possible to

4369024_1 generate alternative interpretations for the geology. Given the level of confidence at which the Resource is classified it is not expected that alternative interpretations would have a major impact on either resource classification or grade estimation.  Marine phosphorite deposits typically occur as laterally extensive units with multi- kilometre scale geology and grade continuity. Post-depositional factors like ice bergs gouging through the deposit create short range (tens of metres scale) variability in the grade and geology. Dimensions  The extent and variability of the Mineral Resource expressed as length (along  The Resource has an east-west extent of 60 strike or otherwise), plan width, and depth below surface to the upper and km and north-south extent of 10 to 30 km. lower limits of the Mineral Resource.  The Resource depth extends from the sea floor surface to an average of 0.2 m below the existing sea floor. This depth is constrained by sample depths and it is likely the average depth of the phosphorite extends beyond this. Estimation and  The nature and appropriateness of the estimation technique(s) applied and  Estimation was performed using 2D accumulation 2 modelling key assumptions, including treatment of extreme grade values, domaining, Ordinary Kriging on the parameters Ph kg/m (i.e. techniques grade x thickness), Depth and SQR. The grade (Ph interpolation parameters and maximum distance of extrapolation from data 3 2 points. If a computer assisted estimation method was chosen include a kg/m ) was then calculated by dividing Ph kg/m by the estimated Depth for each block. Two- description of computer software and parameters used. dimensional accumulation estimation is  The availability of check estimates, previous estimates and/or mine considered appropriate because there is a production records and whether the Mineral Resource estimate takes negative correlation between thickness and grade, appropriate account of such data. and variability in the vertical direction is  The assumptions made regarding recovery of by-products. disregarded as selective mining is not possible.  Estimation of deleterious elements or other non-grade variables of economic  Modelling was undertaken in Surpac.  A block model was constructed that covers the

4369024_1 significance (eg sulphur for acid mine drainage characterisation). main sampled area. A block size of 1 km x 1 km  In the case of block model interpolation, the block size in relation to the (XY) was chosen, based on the average data average sample spacing and the search employed. spacing in the main sample areas, hereby attempting to maintain a balance between the  Any assumptions behind modelling of selective mining units. sparsely sampled and densely sampled areas. The  Any assumptions about correlation between variables. more densely sampled areas may statistically  Description of how the geological interpretation was used to control the require a smaller block size for optimum 2 resource estimates. estimation parameters but the 1 km was considered applicable given the proposed mining  Discussion of basis for using or not using grade cutting or capping. method. The model was brought into two  The process of validation, the checking process used, the comparison of dimensions (only one block in the z-direction) and model data to drill hole data, and use of reconciliation data if available. all the samples given an elevation of 0.5 m RL.  A circular search was applied, with search distance based on the ranges from the variograms constructed in Snowdon’s Supervisor v8.2 software. A maximum 3,000 m search distance was determined.  Each of the domains was estimated in isolation, i.e. neighbouring data from other seismic facies domains were excluded from the estimation process.  Investigation of cumulative frequency, histograms, and mean/variance vs. top-cut plots indicated that top-cutting was warranted for the distribution in domain 9. A grade cap of 150 kg/m2 was chosen which caps two outlier samples to this value and lowers the mean of the domain from 35 to 32 Ph kg/m2. The depth was not capped as it was limited to the depth of the sampling tool used.  The Mineral Resource estimate was not constrained by estimation domains. Extrapolation of grades into blocks was therefore simply controlled by the size of the search ellipse which was kept at a conservatively short distance based on spatial analysis of the sample data. Extrapolation of data into poorly sampled areas

4369024_1 was minimised where relevant, given the various uncertainties involved with the data.  The Mineral Resource estimate is the first JORC compliant Resource constructed on the Chatham Rise so it cannot be compared to earlier JORC compliant resources, however, it compares well to historic estimates that were not compliant with the guidelines as set out by the JORC Code, 2012 edition.  No previous production has occurred on the Project to allow comparisons with the Resource.  The estimation does not include any by-products as not enough relevant information is available to make estimations.  No deleterious elements such as cadmium have been modelled as not enough relevant information is available to make estimations.  Cadmium is regarded as a key deleterious element for phosphorite products. Testwork to date show that cadmium levels are generally below the level of detection.  The model is considered appropriate for the potential mining options where a drag head dredge is pulled along the sea floor, and the phosphorite layer is broken up and then pumped to the ship where it is processed. The optimal mining depth is 35 cm from the sea floor surface. The method will essentially be non-selective as the dredge will drag in an oblique path in a 5 by 2 km mining block.  The model did not include any assumptions between variables.  Each of the domains was estimated in isolation, i.e. neighbouring data from other seismic facies domains were excluded from the estimation

4369024_1 process. Each block therefore ended up with an estimated value for Ph kg/m2, Depth and SQR.  Investigation of cumulative frequency, histograms, and mean/variance vs. top-cut plots indicated that top-cutting was warranted for the distribution in domain 9. A grade cap of 150 kg/m2 was chosen which caps two outlier samples to this value and lowers the mean of the domain from 35 to 32 Ph kg/m2. The depth was not capped as it was limited to the depth of the sampling tool used.  The model was checked for representativeness by comparing the raw data with the block data for each domain. This showed several instances in a densely sampled area, a zero-grade sample surrounded by several high grade samples. This high local variability is also clear from the variogram and has been included into the blocks. Moisture  Whether the tonnages are estimated on a dry basis or with natural moisture,  Tonnages are estimated on a wet tonnage and the method of determination of the moisture content. basis and no estimation of moisture content has been included.

Cut-off  The basis of the adopted cut-off grade(s) or quality parameters applied.  A cut-off grade of 100 kg/m3 was used in the parameters classification of the Resource. This is based on conceptual revenue from forward sales of phosphorite per tonne (USD 125) and mining operating costs per phosphorite landed tonne (USD 85 to 97) presented by CRP. Mining factors  Assumptions made regarding possible mining methods, minimum mining  CRP and their partner Boskalis propose using or assumptions dimensions and internal (or, if applicable, external) mining dilution. It is a mining vessel built or modified to meet the always necessary as part of the process of determining reasonable prospects specific requirements of the Project. The for eventual economic extraction to consider potential mining methods, but phosphorite layer would be retrieved from the the assumptions made regarding mining methods and parameters when seabed using the principles of a conventional estimating Mineral Resources may not always be rigorous. Where this is the trailing suction hopper dredger or drag-head. case, this should be reported with an explanation of the basis of the mining This material would be brought to the surface

4369024_1 assumptions made. via a riser and processed on-board the mining vessel; the phosphorite nodules (>2 mm) being retained and stored on the vessel and the tailings returned to the seabed via a sinker and diffuser. When the vessel’s holds are full, the mining vessel would stop mining and proceed to a port where the phosphorite would be unloaded, stored and distributed to the market.  The proposed 4.5 m wide drag-head is designed to efficiently collect phosphorite nodules from a layer that varies in thickness from 0 to 50 cm, 35 cm in average, and to avoid dredging the underlying chalk/ooze layer. Where the phosphorite-bearing sediment is thicker than 50 cm the drag-head would not be able to mine the entire layer and would therefore leave some of the nodules behind. Metallurgical  The basis for assumptions or predictions regarding metallurgical amenability.  It is proposed that the phosphorite material to factors or It is always necessary as part of the process of determining reasonable be mined from the Chatham Rise is a bulk assumptions prospects for eventual economic extraction to consider potential metallurgical product that will be sold to customers in its methods, but the assumptions regarding metallurgical treatment processes recovered raw state. All material received at and parameters made when reporting Mineral Resources may not always be the ship will be processed through a rigorous. Where this is the case, this should be reported with an explanation separation plant, with the >2 mm fraction of the basis of the metallurgical assumptions made. retained and stored in the ship’s hold.  Boskalis investigated the implications of minimum grain separation scenarios with separation at 2 mm being regarded as the most optimal.  Analyses were completed for major element chemistry and trace elements on both

4369024_1 Valdivia and Sonne samples in two size fractions >8 mm and 1-8 mm. Larger nodules

had lower P2O5 and higher CaO content than the smaller ones. In 63 analyses from 38 Sonne samples the >8 mm nodules averaged

19.8% P2O5 and the 1–8 mm nodules averaged 22.2%. In 63 Valdivia bulk samples

the P2O5 average was 22.0%. Environmental  Assumptions made regarding possible waste and process residue disposal  CRP conceptual tailings proposal has factors or options. It is always necessary as part of the process of determining sediment less than 2 mm in size returned to assumptions reasonable prospects for eventual economic extraction to consider the the seabed via a flexible sinker hose and a potential environmental impacts of the mining and processing operation. diffuser that will release the material within While at this stage the determination of potential environmental impacts, 10m of the sea floor. Boskalis are working on particularly for a greenfields project, may not always be well advanced, the design concepts that ensure the tailings are status of early consideration of these potential environmental impacts should deposited back to the sea floor with minimum be reported. Where these aspects have not been considered this should be sediment dispersion by reducing the high-flow reported with an explanation of the environmental assumptions made. velocity of the sinker and increasing the dispersers on the lower part of the sinker.  CRP has collected a variety of marine information to develop an informed assessment of the marine environment and the potential impacts that exploration and extraction may have on this environment.  CRP has undertaken a comprehensive literature review of the occurrence of spawning and juvenile-rearing areas of commercially-significant deep-water fish species in and around the CRP licence area, to assess possible sensitivities to mining.  CRP has commissioned Golders Associates Ltd to undertake a Marine Consent Application and Environmental Impact

4369024_1 Assessment (EIA) for the Chatham Rise Project. The purpose of the report is an EIA in support of the application by CRP for a marine consent. This EIA has been prepared in accordance with the framework outlined in the Exclusive Economic Zone Act. This report will be structured to cover all environmental and social impacts that could potentially arise from the Chatham Rise Project. Bulk density  Whether assumed or determined. If assumed, the basis for the assumptions. If  Density measurements were taken on the determined, the method used, whether wet or dry, the frequency of the Valdivia, Sonne, Tranquil Image and Dorado measurements, the nature, size and representativeness of the samples. Discovery cruises. Tests included bulk density  The bulk density for bulk material must have been measured by methods that of phosphorite bearing sands, ooze below the adequately account for void spaces (vugs, porosity, etc), moisture and sand, phosphorite nodules. differences between rock and alteration zones within the deposit.  Density measurements were not  Discuss assumptions for bulk density estimates used in the evaluation process systematically applied to all samples and of the different materials. were conducted on selected samples.  All samples have an assumed density.  Sample phosphorite grade is determined by multiplying the calculated phosphorite volume percent by the 2.72 g/cm3 (average wet density of phosphorite nodules collected by CRP)  Ten samples collected by CRP from the Tranquil Image cruise made up of composited material from 1 to 4 samples each were submitted to Boskalis Dolman Laboratory for Environmental and Geotechnical Research, to test nodule density and water absorption. One to six nodules from each composite were tested, totalling 36 analyses. Sample density was determined using the weight in water

4369024_1 and weight in air method. Samples were dried at 110ºC for an unspecified length of time to determine their dry density. The samples’ dry weights ranged from 1.9 to 69.8 g. When two outliers are excluded the samples yielded an average dry density of phosphorite nodules of 2.65 g/cm3, an average wet density of 2.72 g/cm3, and average water absorption of 2.8%. Classification  The basis for the classification of the Mineral Resources into varying  The Mineral Resource has been reported as confidence categories. an Inferred Mineral Resource under the JORC  Whether appropriate account has been taken of all relevant factors (ie relative code, 2012 edition. confidence in tonnage/grade estimations, reliability of input data, confidence  Geological evidence from geophysical in continuity of geology and metal values, quality, quantity and distribution of surveys, video mapping and sampling is the data). sufficient to imply geological and grade  Whether the result appropriately reflects the Competent Person’s view of the continuity over tens of kilometres. deposit.  The Mineral Resource is based on exploration, sampling gathered using appropriate sampling techniques that have been ranked for quality.  Samples have been taken from insitu outcrop on the sea floor.  Extrapolation of the resource up to 3,000 m from known sample points is valid based on the size of the deposit and variogram modelling.  The resource classification accounts for all relevant factors.  The result of the Mineral Resource estimate adequately reflects the Competent Person's view of the deposit. Audits or  The results of any audits or reviews of Mineral Resource estimates.  The Resource has not been independently

4369024_1 reviews reviewed. Discussion of  Where appropriate a statement of the relative accuracy and confidence level  Confidence in the relative accuracy of the relative in the Mineral Resource estimate using an approach or procedure deemed estimates is reflected by the classification of accuracy/ appropriate by the Competent Person. For example, the application of estimate as Inferred. confidence statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.  The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.  These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

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Appendix II: Sample Details, SQR 1 to 4 Notes: 1. Sample details are limited to informing samples used in the Mineral Resource. 2. Samples with an SQR 5 to 7 are not shown. 3. SQR is sample quality ranking, see Appendix I Section 1. 4. Ph Grade kg/m3 is the weight of phosphorite per cubic metre. Sample Easting Northing SQR Thickness Ph Grade (UTM) (UTM) m kg/m3 VA004 686775 5180854 4 0.15 346.53 VA013 687498 5182878 2 0.19 489.60 VA020 683382 5182653 4 0.15 810.34 VA021 683513 5182573 4 0.26 49.98 VA023 683418 5181367 2 0.18 654.28 VA024 683300 5181410 4 0.00 0.00 VA025 683421 5181258 4 0.00 0.00 VA026 683584 5181169 4 0.00 0.00 VA027 683598 5180344 4 0.00 0.00 VA032 683556 5178287 3 0.15 952.00 VA033 683533 5180893 3 0.26 249.90 VA041 685862 5180065 4 0.17 118.47 VA045 685934 5179732 4 0.27 58.99 VA048 688713 5184053 3 0.21 499.80 VA051 688538 5180815 2 0.30 35.24 VA054 688462 5177623 3 0.11 114.75 VA061 683418 5182409 2 0.19 44.43 VA062 683602 5182256 2 0.18 70.15 VA069 691662 5182626 3 0.11 1085.99 VA071 689823 5182985 4 0.23 574.13 VA072 688867 5182948 3 0.26 92.99 VA083 686115 5178066 3 0.19 177.71 VA085 686086 5176123 3 0.18 808.42 VA092 691459 5179154 2 0.11 977.39 VA100 685996 5184136 2 0.09 193.80 VA102 685556 5182850 3 0.28 7.71 VA107 685460 5180486 3 0.30 66.64 VA113 686617 5177632 3 0.08 787.56 VA114 686948 5177234 4 0.15 783.36 VA116 687686 5176806 3 0.27 23.45 VA117 688320 5176693 2 0.24 15.30 VA122 687050 5183245 4 0.00 0.00 VA124 687162 5184295 4 0.00 0.00 VA126 687260 5185136 3 0.29 100.95 VA127 687384 5185624 4 0.29 28.71 VA133 687423 5178339 3 0.13 31.47

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VA135 687375 5179168 4 0.18 746.37 VA137 687307 5179750 3 0.10 559.78 VA139 687494 5180310 4 0.27 16.15 VA142 687744 5180927 4 0.14 837.76 VA146 687808 5181854 3 0.18 307.81 VA150 688260 5183008 3 0.20 555.33 VA158 690183 5185292 3 0.06 95.67 VA160 690059 5184716 3 0.30 29.32 VA164 690006 5182086 3 0.22 116.62 VA167 690095 5179909 3 0.20 799.68 VA174 689203 5184893 3 0.19 755.25 VA178 689089 5182902 4 0.28 43.07 VA179 689191 5182270 3 0.12 710.83 VA180 689138 5181539 3 0.20 64.60 VA182 689156 5180613 4 0.18 510.43 VA183 689289 5180223 4 0.29 86.98 VA184 687928 5182073 4 0.00 0.00 VA191 690828 5182414 3 0.13 952.00 VA196 690018 5180951 3 0.13 837.76 VA199 689985 5179706 4 0.27 121.60 VA200 689967 5179426 2 0.30 10.36 VA207 689033 5183110 3 0.30 196.41 VA215 687968 5179379 4 0.20 561.18 VA216 687969 5178877 3 0.10 479.81 VA233 686469 5177501 4 0.00 0.00 VA234 686460 5177253 4 0.18 826.34 VA236 684551 5178432 3 0.15 224.40 VA239 684865 5180476 3 0.18 733.04 VA242 684537 5182056 2 0.25 32.64 VA247 685645 5184770 2 0.09 1043.06 VA248 685750 5184228 2 0.19 495.27 VA250 685696 5183685 3 0.27 57.42 VA251 685776 5183503 4 0.14 198.77 VA252 685654 5183117 3 0.20 222.13 VA253 686167 5183166 4 0.14 571.20 VA255 686391 5183657 3 0.16 444.27 VA258 687989 5184129 4 0.13 533.12 VA260 688541 5183820 2 0.16 799.68 VA262 688884 5183971 2 0.23 466.48 VA269 686155 5182791 3 0.25 484.50 VA270 686483 5183031 3 0.29 84.18 VA271 686755 5183158 2 0.29 12.78 VA273 687239 5183549 3 0.09 1029.89 VA274 686791 5182583 4 0.23 74.61

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VA507 682957 5179409 4 0.29 55.95 VA509 682850 5178156 4 0.17 710.83 VA511 682893 5177139 3 0.09 166.11 VA513 682886 5176076 2 0.12 633.08 VA518 684656 5177157 4 0.24 69.31 VA522 685080 5176122 2 0.11 799.68 VA528 676100 5185269 4 0.28 96.93 VA531 674903 5184131 4 0.28 36.18 VA533 674025 5183612 2 0.11 666.40 VA546 673494 5180479 4 0.17 186.84 VA552 673400 5176927 4 0.29 13.60 VA553 673379 5176338 4 0.27 65.28 VA555 673605 5186968 2 0.17 776.77 VA556 673552 5187599 4 0.29 60.29 VA559 673661 5189431 4 0.33 0.00 VA566 679478 5184505 2 0.10 745.70 VA567 679466 5183993 3 0.20 343.95 VA568 679435 5183478 4 0.26 333.20 VA572 679295 5181411 4 0.22 869.98 VA574 679259 5181351 3 0.30 319.87 VA576 679266 5180029 4 0.17 666.40 VA579 679386 5187708 3 0.18 27.20 VA581 678653 5187624 4 0.12 57.80 VA582 678316 5187488 4 0.15 5.80 VA587 675535 5187680 4 0.13 652.80 VA590 673662 5187969 4 0.10 48.96 VA602 669216 5182873 4 0.23 50.77 VA604 669182 5183899 4 0.10 92.86 VA607 669200 5185666 4 0.22 0.92 VA609 669933 5185152 4 0.22 13.60 VA615 672567 5183581 4 0.17 480.86 VA632 677729 5178993 3 0.23 26.61 VA633 675648 5179675 4 0.10 666.40 VA636 674087 5180485 3 0.16 166.71 VA638 673075 5181019 4 0.15 413.44 VA665 676699 5182564 3 0.14 610.87 VA671 673762 5182312 3 0.09 682.18 VA675 673894 5184414 4 0.16 285.60 SO001 691870 5173502 4 0.37 645.26 SO002 694668 5171192 4 0.15 92.21 SO011 691773 5176235 3 0.37 192.08 SO012 691740 5175886 1 0.02 159.89 SO013 691658 5175577 1 0.09 350.87 SO014 691197 5177343 4 0.01 463.36

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SO015 690119 5174700 3 0.37 7.14 SO016 691849 5174920 1 0.11 570.93 SO017 691686 5174013 3 0.23 592.01 SO018 691566 5173106 1 0.14 348.09 SO019 691646 5172316 1 0.07 99.19 SO020 691389 5171596 3 0.37 27.34 SO021 691209 5171043 3 0.37 93.61 SO022 692593 5175637 1 0.14 414.57 SO023 692501 5174918 1 0.06 225.44 SO024 692747 5174638 3 0.33 644.63 SO025 692500 5173799 1 0.02 470.79 SO026 692337 5173298 3 0.37 0.00 SO027 692314 5172699 3 0.37 19.85 SO030 693335 5174963 1 0.07 137.38 SO031 693617 5174544 1 0.15 154.22 SO032 693279 5173956 1 0.06 951.28 SO033 693346 5173336 1 0.06 23.41 SO034 693584 5172779 1 0.11 289.93 SO035 693575 5172144 2 0.36 20.90 SO036 693850 5171827 2 0.36 0.00 SO037 693675 5171424 2 0.36 0.00 SO038 694472 5175887 1 0.04 27.37 SO039 694415 5175376 1 0.12 414.61 SO040 694592 5175254 2 0.14 892.19 SO041 694337 5174421 1 0.34 198.37 SO043 694194 5173324 1 0.27 0.00 SO045 693784 5171926 3 0.37 0.00 SO048 695587 5175408 3 0.37 44.05 SO050 695602 5173998 1 0.24 60.09 SO051 695794 5173511 1 0.11 240.80 SO052 695740 5173007 2 0.36 102.43 SO053 695725 5172140 1 0.11 135.25 SO054 693046 5169520 2 0.36 0.00 SO055 693478 5175580 1 0.07 749.89 SO056 693672 5175109 1 0.25 57.89 SO057 694030 5174506 1 0.27 2.86 SO058 696595 5176648 1 0.18 91.72 SO060 696603 5175801 1 0.14 0.00 SO062 696568 5175054 1 0.08 308.14 SO065 696556 5173673 1 0.32 28.30 SO066 699059 5173184 1 0.21 183.14 SO067 696573 5173274 1 0.07 151.15 SO069 696720 5172899 3 0.37 0.00 SO070 696742 5172486 2 0.18 562.42

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SO531 720357 5174622 2 0.11 499.17 SO532 719872 5172910 3 0.38 58.79 SO534 710054 5175747 4 0.10 361.65 SO535 708818 5175811 4 0.07 570.67 SO536 709995 5175093 4 0.30 768.42 SO537 709291 5171639 4 0.10 71.36 SO538 705276 5172855 4 0.03 77.43 SO539 707567 5174317 4 0.04 141.19 SO540 707424 5172951 4 0.38 0.00 SO541 704889 5175661 4 0.07 262.81 SO543 660163 5180255 4 0.38 0.00 SO544 659816 5178958 4 0.06 661.47 SO545 659785 5177457 4 0.07 640.50 SO546 658518 5177821 4 0.38 0.00 SO547 658337 5176596 4 0.38 0.00

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